##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-7872
 
 BREEZE-EASTERN CORPORATION
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    95-4062211
(I.R.S. employer
identification no.)35 Melanie Lane 
Whippany, New Jersey
(Address of principal executive offices)
    
    07981
(Zip Code)
   þ o
  o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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##### 



INDEX
 Page No.PART 1
    
    Financial InformationItem 1.
    
    Condensed Consolidated Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Balance Sheets
September 30, 2010 (Unaudited) and March 31,2010
    
    
    4Condensed Consolidated Statements of Operations Three and Six Month Periods
Ended September 30, 2010 and September 27, 2009 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows Six Month Periods Ended
September 30, 2010 and September 27, 2009 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7 - 18Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    19 - 28Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 4.
    
    Controls and Procedures
    
    
    30PART II.
    
    Other InformationItem 1.
    
    Legal Proceedings
    
    
    30Item 1A.
    
    Risk Factors
    
    
    30Item 6.
    
    Exhibits
    
    
    31SIGNATURES
    
    
    31EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  st
  3




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##### Table of Contents



BREEZE-EASTERN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
    
    (Audited)September 30, 2010
    
    March 31, 2010ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    4,887
    
    
    $
    3,371Accounts receivable (net of allowance for doubtful accounts
of $156 at September 30, 2010 and $150 at March 31, 2010)
    
    
    10,787
    
    
    
    12,102Tax refund receivable
    
    
    904
    
    
    
    904Inventories
    
    
    17,908
    
    
    
    17,365Prepaid expenses and other current assets
    
    
    715
    
    
    
    423Deferred income taxes
    
    
    5,541
    
    
    
    5,686Total current assets
    
    
    40,742
    
    
    
    39,851PROPERTY:Property and equipment
    
    
    17,301
    
    
    
    20,323Less accumulated depreciation and amortization
    
    
    8,363
    
    
    
    10,748Property  net
    
    
    8,938
    
    
    
    9,575OTHER ASSETS:Deferred income taxes
    
    
    13,066
    
    
    
    13,718Goodwill
    
    
    402
    
    
    
    402Real estate held for sale
    
    
    3,800
    
    
    
    3,800Other
    
    
    8,916
    
    
    
    8,762Total other assets
    
    
    26,184
    
    
    
    26,682TOTAL ASSETS
    
    $
    75,864
    
    
    $
    76,108LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITES:Revolving credit facility
    
    $
    
    
    
    $
    Current portion of long-term debt
    
    
    2,464
    
    
    
    3,286Accounts payable  trade
    
    
    6,295
    
    
    
    5,578Accrued compensation
    
    
    2,492
    
    
    
    2,286Accrued income taxes
    
    
    200
    
    
    
    114Other current liabilities
    
    
    3,016
    
    
    
    3,399Total current liabilities
    
    
    14,467
    
    
    
    14,663LONG-TERM DEBT, NET OF CURRENT PORTION
    
    
    13,143
    
    
    
    14,786OTHER LONG-TERM LIABILITIES
    
    
    18,965
    
    
    
    18,839COMMITMENTS AND CONTINGENCIES (Note 13)
    
    
    
    
    
    
    TOTAL LIABILITIES
    
    
    46,575
    
    
    
    48,288STOCKHOLDERS EQUITYPreferred stock  authorized, 300,000 shares; none issued
    
    
    
    
    
    
    Common stock  authorized, 14,700,000 shares of $.01 par
value; issued, 9,846,003 at September 30, 2010 and 9,813,097
at March 31, 2010
    
    
    98
    
    
    
    98Additional paid-in capital
    
    
    94,810
    
    
    
    94,612Accumulated deficit
    
    
    (58,630
    )
    
    
    (59,863
    )Accumulated other comprehensive loss
    
    
    (240
    )
    
    
    (285
    )36,038
    
    
    
    34,562Less
treasury stock, at cost  416,967 at September 30, 2010 and 416,147 at March 31, 2010
    
    
    (6,749
    )
    
    
    (6,742
    )Total stockholders equity
    
    
    29,289
    
    
    
    27,820TOTAL LIABILITIES & STOCKHOLDERS EQUITY
    
    $
    75,864
    
    
    $
    76,108
  4




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BREEZE-EASTERN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Three Months Ended
    
    Six Months EndedSeptember 30, 2010
    
    September 27, 2009
    
    September 30, 2010
    
    September 27, 2009Net sales
    
    $
    15,106
    
    
    $
    16,408
    
    
    $
    31,646
    
    
    $
    29,770Cost of sales
    
    
    8,930
    
    
    
    10,445
    
    
    
    19,337
    
    
    
    18,573Gross profit
    
    
    6,176
    
    
    
    5,963
    
    
    
    12,309
    
    
    
    11,197Selling, general, and administrative expenses
    
    
    4,816
    
    
    
    4,488
    
    
    
    9,446
    
    
    
    8,672Relocation expense
    
    
    
    
    
    
    51
    
    
    
    211
    
    
    
    189Operating income
    
    
    1,360
    
    
    
    1,424
    
    
    
    2,652
    
    
    
    2,336Interest expense
    
    
    170
    
    
    
    229
    
    
    
    383
    
    
    
    463Other expense  net
    
    
    81
    
    
    
    67
    
    
    
    145
    
    
    
    128Income before incomes taxes
    
    
    1,109
    
    
    
    1,128
    
    
    
    2,124
    
    
    
    1,745Income tax provision
    
    
    466
    
    
    
    474
    
    
    
    892
    
    
    
    733Net income
    
    $
    643
    
    
    $
    654
    
    
    $
    1,232
    
    
    $
    1,012Earnings per common share:Basic net income per share
    
    $
    0.07
    
    
    $
    0.07
    
    
    $
    0.13
    
    
    $
    0.11Diluted net income per share
    
    
    0.07
    
    
    
    0.07
    
    
    
    0.13
    
    
    
    0.11Weighted-average basic shares outstanding
    
    
    9,400,000
    
    
    
    9,389,000
    
    
    
    9,398,000
    
    
    
    9,377,000Weighted-average diluted shares outstanding
    
    
    9,412,000
    
    
    
    9,394,000
    
    
    
    9,412,000
    
    
    
    9,388,000
  5




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BREEZE-EASTERN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six Months EndedSeptember 30, 2010
    
    September 27, 2009Cash flows from operating activities:Net income
    
    $
    1,232
    
    
    $
    1,012Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Loss on disposal of property and equipment
    
    
    29
    
    
    
    Depreciation and amortization
    
    
    998
    
    
    
    740Non-cash reserve accretion
    
    
    218
    
    
    
    16Stock based compensation
    
    
    195
    
    
    
    356Provision for losses on accounts receivable
    
    
    6
    
    
    
    3Deferred taxes-net
    
    
    764
    
    
    
    627Changes in assets and liabilities:Decrease in accounts receivable and other receivables
    
    
    1,310
    
    
    
    4,021(Increase) decrease in inventories
    
    
    (543
    )
    
    
    (6,194
    )(Increase) decrease in other assets
    
    
    (277
    )
    
    
    (427
    )Increase (decrease) in accounts payable
    
    
    717
    
    
    
    (209
    )Increase (decrease) in accrued compensation
    
    
    202
    
    
    
    390Increase (decrease) in accrued income taxes
    
    
    86
    
    
    
    (12
    )Increase (decrease) in other liabilities
    
    
    (396
    )
    
    
    (369
    )Net cash provided by (used in) operating activities
    
    
    4,541
    
    
    
    (46
    )Cash flows from investing activities:Capital expenditures
    
    
    (386
    )
    
    
    (1,610
    )Capitalized project costs
    
    
    (174
    )
    
    
    (382
    )Net cash (used in) investing activities
    
    
    (560
    )
    
    
    (1,992
    )Cash flows from financing activities:Payments on long-term debt
    
    
    (2,465
    )
    
    
    (1,642
    )Net borrowings (repayments) of other debt
    
    
    
    
    
    
    2,400Net cash (used in) provided by financing activities
    
    
    (2,465
    )
    
    
    758Increase (decrease) in cash
    
    
    1,516
    
    
    
    (1,280
    )Cash at beginning of period
    
    
    3,371
    
    
    
    2,667Cash at end of period
    
    $
    4,887
    
    
    $
    1,387Supplemental information:Interest payments
    
    $
    325
    
    
    $
    389Income tax payments
    
    
    42
    
    
    
    117
  6




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NOTE 1. Financial Presentation
  NOTE 2. Earnings Per Share
   Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 27,
    
    September 30,
    
    September 27,2010
    
    2009
    
    2010
    
    2009Basic Earnings per Common Share:Weighted-average common shares
outstanding for basic earnings
per share calculation
    
    
    9,400,000
    
    
    
    9,389,000
    
    
    
    9,398,000
    
    
    
    9,377,000Diluted Earnings per Common Share:Weighted-average common shares
outstanding
    
    
    9,400,000
    
    
    
    9,389,000
    
    
    
    9,398,000
    
    
    
    9,377,000Stock options (a)
    
    
    12,000
    
    
    
    5,000
    
    
    
    14,000
    
    
    
    11,000Weighted-average common shares
outstanding for diluted earnings
per share calculation
    
    
    9,412,000
    
    
    
    9,394,000
    
    
    
    9,412,000
    
    
    
    9,388,000
 
 (a)
    
    During the three and six month periods ended September 30, 2010, options to purchase 354,000
and 360,000 shares of common stock, respectively, and during the three and six month periods
ended September 27, 2009, options to purchase 493,000 and 438,000 shares of common stock,
respectively, were not included in the computation of diluted earnings per share because the
exercise prices of these options were greater than the average market price of the common
share. NOTE 3. Stock-Based Compensation
   7




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2011 $2.41
    
    2010 $2.52
    
    2010 $2.55
    
    2010 $2.63value per
    
    value per
    
    value per
    
    value peroption
    
    option
    
    option
    
    optionDividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Volatility
    
    
    30.2
    %
    
    
    32.6
    %
    
    
    34.0
    %
    
    
    34.0
    %Risk-free interest rate
    
    
    3.2
    %
    
    
    3.1
    %
    
    
    3.2
    %
    
    
    3.4
    %Expected term of
options (in years)
    
    
    7.0
    
    
    
    7.0
    
    
    
    7.0
    
    
    
    7.0
 8




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##### Table of Contents



Aggregate
    
    Approximate
    
    Weighted-Intrinsic
    
    Remaining
    
    AverageNumber
    
    Value
    
    Contractual
    
    Exerciseof Shares
    
    (in thousands)
    
    Term (Years)
    
    PriceOutstanding at March 31, 2010
    
    
    624,911
    
    
    $
    198
    
    
    
    7
    
    
    $
    8.38Granted
    
    
    26,000
    
    
    
    
    
    
    
    
    
    
    
    6.20Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled or expired
    
    
    (63,000
    )
    
    
    
    
    
    
    
    
    
    
    9.07Outstanding at September 30, 2010
    
    
    587,911
    
    
    
    232
    
    
    
    6
    
    
    
    8.21Options
exercisable at September 30, 2010
    
    
    431,244
    
    
    
    106
    
    
    
    5
    
    
    
    8.83Unvested options expected to become
exercisable after September 30, 2010
    
    
    156,667
    
    
    
    125
    
    
    
    9
    
    
    
    6.49Shares
available for future option grants at
September 30, 2010 (a)
    
    
    167,308
 
 (a)
    
    May be decreased by restricted stock grants.     Weighted-AverageNumber
    
    Grant Dateof Shares
    
    Fair ValueNon-vested at March 31, 2010
    
    
    37,984
    
    
    $
    6.43Granted
    
    
    32,906
    
    
    
    6.85Vested
    
    
    (36,899
    )
    
    
    6.29Cancelled
    
    
    ( 239
    )
    
    
    11.07Non-vested at September 30, 2010
    
    
    33,752
    
    
    
    6.95
  9




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NOTE 4. Inventories
  September 30,
    
    
    March 31,2010
    
    
    2010Finished goods
    
    $
    979
    
    
    $
    1,985Work in process
    
    
    6,161
    
    
    
    6,133Purchased and manufactured parts
    
    
    13,430
    
    
    
    11,78520,570
    
    
    
    19,903Reserve for slow moving and obsolescence
    
    
    (2,662
    )
    
    
    (2,538
    )Total
    
    $
    17,908
    
    
    $
    17,365
  NOTE 5. Property, Equipment, and Related Depreciation
   Machinery and equipment
    
    3 to 10 yearsFurniture and fixtures
    
    3 to 10 yearsComputer hardware and software
    
    3 to 5 yearsLeasehold improvements
    
    10 years
  10




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NOTE 6. Product Warranty Costs
  Balance at March 31, 2010
    
    $
    179Warranty costs incurred
    
    
    ( 74
    )Change in estimates to pre-existing warranties
    
    
    ( 7
    )Product warranty accrual
    
    
    85Balance at September 30, 2010
    
    $
    183
 NOTE 7. Income Taxes
       11




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NOTE 8. Long-Term Debt Payable to Banks
  September 30, 2010
    
    
    March 31, 2010Senior Credit Facility
    
    $
    15,607
    
    
    $
    18,072Less current maturities
    
    
    2,464
    
    
    
    3,286Total long-term debt
    
    $
    13,143
    
    
    $
    14,786
 Senior Credit Facility -
   Interest Rate Swap
 12




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NOTE 9. Fair Value Measurements
  
    
    Level 1- Unadjusted quoted prices for identical assets or liabilities in active markets;
    
    Level 2-Inputs other than quoted prices in active markets for identical assets or
liabilities that are observable whether directly or indirectly for substantially the full
term of the asset or liability; and
    
    Level 3-Unobservable inputs for the asset or liability, which include managements own
assumptions about what the assumptions market participants would use in pricing the asset
or liability, including assumptions about risk.
   Carrying Amount
    
    Fair ValueLong-term debt
    
    $
    15,607
    
    
    $
    15,607Interest rate swap liability included in
other long-term liabilities (Level 2)
    
    
    138
    
    
    
    138
 NOTE 10. Employee Benefit Plans
    13




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Postretirement BenefitsThree Months Ended
    
    
    Six Months EndedSeptember 30, 2010
    
    
    September 27, 2009
    
    
    September 30, 2010
    
    
    September 27, 2009Interest cost
    
    $
    11
    
    
    $
    9
    
    
    $
    18
    
    
    $
    18Amortization of net (gain) loss
    
    
    6
    
    
    
    
    
    
    
    12
    
    
    
    Net periodic cost
    
    $
    17
    
    
    $
    9
    
    
    $
    30
    
    
    $
    18
 Pension PlanThree Months Ended
    
    
    Six Months EndedSeptember 30, 2010
    
    
    September 27, 2009
    
    
    September 30, 2010
    
    
    September 27, 2009Interest cost
    
    $
    45
    
    
    $
    96
    
    
    $
    89
    
    
    $
    96Amortization of net (gain) loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic cost
    
    $
    45
    
    
    $
    96
    
    
    $
    89
    
    
    $
    96
 NOTE 11. Concentration of Credit Risk
  NOTE 12. New Accounting Standards
   14




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NOTE 13. Contingencies
 Environmental Matters
    15




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16




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Litigation
  NOTE 14. Segment, Geographic Location and Customer Information
   Three Months Ended
    
    Six Months EndedSeptember 30, 2010
    
    September 27, 2009
    
    September 30, 2010
    
    September 27, 2009Customer A
    
    
    18
    %
    
    
    30
    %
    
    
    26
    %
    
    
    22
    %Customer B
    
    
    20
    
    
    
    19
    
    
    
    19
    
    
    
    19Customer C
    
    
    18
    
    
    
    20
    
    
    
    16
    
    
    
    22Customer D
    
    
    10
    
    
    
    7
    
    
    
    11
    
    
    
    8
 17




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Three Months Ended
    
    Six Months EndedLocation
    
    September 30, 2010
    
    September 27, 2009
    
    September 30, 2010
    
    September 27, 2009United States
    
    $
    7,990
    
    
    $
    9,679
    
    
    $
    18,266
    
    
    $
    15,975Italy
    
    
    1,649
    
    
    
    3,040
    
    
    
    3,206
    
    
    
    5,259England
    
    
    590
    
    
    
    332
    
    
    
    950
    
    
    
    611Other European countries
    
    
    1,603
    
    
    
    802
    
    
    
    2,492
    
    
    
    2,031Pacific and Far East
    
    
    1,634
    
    
    
    702
    
    
    
    3,168
    
    
    
    2,294Other international
    
    
    1,640
    
    
    
    1,853
    
    
    
    3,564
    
    
    
    3,600Total
    
    $
    15,106
    
    
    $
    16,408
    
    
    $
    31,646
    
    
    $
    29,770
 18




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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
     19




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OVERVIEW
  CORE BUSINESS
  PRODUCTS AND SERVICES
  Products
      20




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Services
    LABOR MATTERS
  OUTLOOK
  CRITICAL ACCOUNTING POLICIES
  21




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Results of Operations
 Three Months Ended September 30, 2010 Compared with Three Months Ended September 27, 2009
 Three Months Ended
    
    Increase/(Decrease)September 30,
    
    September 27,2010
    
    2009
    
    $
    
    %Products
    
    $
    10,788
    
    
    $
    11,725
    
    
    $
    (937
    )
    
    
    (8.0
    )%Services
    
    
    4,318
    
    
    
    4,683
    
    
    
    (365
    )
    
    
    (7.8
    )Net sales
    
    
    15,106
    
    
    
    16,408
    
    
    
    (1,302
    )
    
    
    (7.9
    )Products
    
    
    5,851
    
    
    
    7,312
    
    
    
    (1,461
    )
    
    
    (20.0
    )Services
    
    
    3,079
    
    
    
    3,133
    
    
    
    (54
    )
    
    
    (1.7
    )Cost of sales
    
    
    8,930
    
    
    
    10,445
    
    
    
    (1,515
    )
    
    
    (14.5
    )Gross profit
    
    
    6,176
    
    
    
    5,963
    
    
    
    213
    
    
    
    3.6As a % of net sales
    
    
    40.9
    %
    
    
    36.3
    %
    
    
    N/A
    
    
    4.6
    %PtSelling,
general, and administrative
expenses
    
    
    4,816
    
    
    
    4,488
    
    
    
    328
    
    
    
    7.3
    %Relocation expense
    
    
    
    
    
    
    51
    
    
    
    (51
    )
    
    
    N/AOperating income
    
    
    1,360
    
    
    
    1,424
    
    
    
    (64
    )
    
    
    (4.5
    )Interest expense
    
    
    170
    
    
    
    229
    
    
    
    (59
    )
    
    
    (25.8
    )Net income
    
    $
    643
    
    
    $
    654
    
    
    $
    (11
    )
    
    
    (1.7
    )%
 Net Sales.
   Cost of Sales.
 22




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##### Table of Contents



Gross profit.
 Selling, General, and Administrative Expenses.
 Interest Expense
 Net Income
 New Orders
  Backlog .
   23




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Six Months Ended September 30, 2010 Compared with Six Months Ended September 27, 2009
 Six Months Ended
    
    Increase/(Decrease)September 30,
    
    September 27,2010
    
    2009
    
    $
    
    %Products
    
    $
    23,873
    
    
    $
    19,913
    
    
    $
    3,960
    
    
    
    19.9
    %Services
    
    
    7,773
    
    
    
    9,857
    
    
    
    (2,084
    )
    
    
    (21.1
    )Net sales
    
    
    31,646
    
    
    
    29,770
    
    
    
    1,876
    
    
    
    6.3Products
    
    
    13,029
    
    
    
    11,864
    
    
    
    1,165
    
    
    
    9.8Services
    
    
    6,308
    
    
    
    6,709
    
    
    
    (401
    )
    
    
    (6.0
    )Cost of sales
    
    
    19,337
    
    
    
    18,573
    
    
    
    764
    
    
    
    4.1Gross profit
    
    
    12,309
    
    
    
    11,197
    
    
    
    1,112
    
    
    
    9.9As a % of net sales
    
    
    38.9
    %
    
    
    37.6
    %
    
    
    N/A
    
    
    1.3
    % PtSelling,
general, and administrative
expenses
    
    
    9,446
    
    
    
    8,672
    
    
    
    774
    
    
    
    8.9
    %Relocation expense
    
    
    211
    
    
    
    189
    
    
    
    22
    
    
    
    11.6Operating income
    
    
    2,652
    
    
    
    2,336
    
    
    
    316
    
    
    
    13.5Interest expense
    
    
    383
    
    
    
    463
    
    
    
    (80
    )
    
    
    (17.3
    )Net income
    
    $
    1,232
    
    
    $
    1,012
    
    
    $
    220
    
    
    
    21.7
    %
 Net Sales.
   Cost of Sales.
 24




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##### Table of Contents



Gross profit.
 Selling, General, and Administrative Expenses.
  Interest Expense
 Net Income
 New Orders
  Backlog
  25




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##### Table of Contents



Liquidity and Capital Resources
    Working Capital
   Capital Expenditures
  Senior Credit Facility
  26




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##### Table of Contents



Interest Rate Swap
  TAX BENEFITS FROM NET OPERATING LOSSES
  CONTRACTUAL OBLIGATIONS
  Payments Due By PeriodLess Than
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    1 Year
    
    1-3 Years
    
    3-5 Years
    
    5 YearsDebt principal
repayments (a)
    
    $
    15,607
    
    
    $
    2,464
    
    
    $
    6,571
    
    
    $
    6,572
    
    
    $
    Estimated interest
payments on long-term
debt (b)
    
    
    1,039
    
    
    
    377
    
    
    
    644
    
    
    
    18
    
    
    
    Operating leases
    
    
    9,194
    
    
    
    1,079
    
    
    
    2,158
    
    
    
    2,029
    
    
    
    3,928Purchase
obligations (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    25,840
    
    
    $
    3,920
    
    
    $
    9,373
    
    
    $
    8,619
    
    
    $
    3,928
 
 (a)
    
    Obligations for long-term debt reflect the requirements of the term loan under the Senior
Credit Facility. See Note 8 of Notes to Condensed Consolidated Financial Statements contained
elsewhere in this report.(b)
    
    Estimated interest payments on long-term debt reflect the scheduled interest payments of the
term loan under the Senior Credit Facility and assume an effective weighted average interest rate
of 3.6%, our blended interest rate at September 30, 2010.(c)
    
    Our supplier purchase orders contain provisions allowing vendors to recover certain costs in
the event of cancellation for convenience by us. We believe that we do not have ongoing purchase
obligations with respect to our suppliers that are material in amount or that would result,
individually or collectively, in a material loss exposure to us if cancelled for convenience.
Furthermore, purchase obligations for capital assets and services historically have not been
material in amount. INFLATION
  CONTINGENCIES
 Environmental matters 
 Litigation 
 27




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##### Table of Contents



RECENTLY ISSUED ACCOUNTING STANDARDS
  28
    Table of Contents  Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     29
    Table of Contents  Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
  30
    Table of Contents  Item 6. EXHIBITS
 31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 SIGNATURES
  BREEZE-EASTERN CORPORATION
(Registrant)Dated:  October 29, 2010
    By:
    /s/  Mark D. MishlerMark D. Mishler, Senior Vice President,Chief Financial Officer, Treasurer, and Secretary * 
 *
    
    On behalf of the Registrant and as Principal Financial and Accounting Officer. 31